Vendor Credit Notes - How to Create and Apply Vendor Credits

1. When to use vendor credit notes

Vendor credit notes are appropriate for:

• Refunds and corrections — Receiving a credit from a vendor for an overcharge, duplicate charge, or bill error.
• Returned goods — Crediting all or some of the items on a bill when you return them to the vendor.
• Discounts after the fact — Applying a post-bill discount or goodwill credit from the vendor.
• Overpayments — Crediting an amount you overpaid so it can be applied to future bills from that vendor.

In Tracksales, vendor credits are always created from an existing bill. You choose the bill (by reference or from the bill’s details), and the vendor credit is linked to that bill’s vendor. You can then apply the credit to that bill and/or other bills for the same vendor. See Bill management for how to finalize bills so they can receive payments and vendor credits.

2. Creating a vendor credit from a bill

You can start a vendor credit in two ways:

• From the Vendor Credits list — Go to Vendor Credits from the main menu, click Create Vendor Credit, then enter the bill reference (e.g. bill number) for the bill you want to credit. The system loads that bill and opens the vendor credit form with the bill’s line items and vendor pre-filled.
• From a bill’s details panel — Open the bill from the Bills list, then in the details panel click Add Vendor Credit. You are taken to the vendor credit create form with that bill already selected and its lines pre-filled.

Vendor credits cannot be created for draft bills. Finalize the bill first (use Mark as Finalized on the bill). The Add Vendor Credit button on a bill’s details panel is only shown for finalized bills (Due or Paid).

On the create form you will see:

• Vendor and Order # — Filled from the bill and read-only when creating from a bill.
• Vendor Credit Date — Editable.
• Line items — Pre-filled from the bill. Each line shows product name, quantity, rate, discount, and tax (with tax rate per line, same as bills). When creating from a bill, you can only change the quantity on each line. Set quantity to 0 for any line you do not want to credit (e.g. to credit only one item out of five). You cannot add new lines or change product, rate, discount, or tax when creating from a bill.
• Remaining creditable amount — A banner at the top shows the bill’s remaining creditable amount. The vendor credit total must not exceed this amount.

Adjust quantities as needed, then click Create Vendor Credit. The vendor credit is saved and linked to the source bill. Only the amount needed to bring that bill’s balance to zero is applied automatically; if the bill is fully paid or partially paid, the rest of the vendor credit remains available to apply to other bills for the same vendor.

3. Vendor credit balance and status

Each vendor credit has:

• Total — The full value of the vendor credit (sum of credited line items with tax).
• Balance (unused credit) — Total minus the total amount already applied to bills. This is the amount you can still apply to other bills.
• Status — Open when there is unused credit (balance > 0); Closed when the full amount has been applied (balance = 0).

The system recalculates balance and status whenever you apply the vendor credit to a bill or remove an application, so you can always see how much is left to use.

4. Applying a vendor credit to bills

You can apply an Open vendor credit to one or more bills for the same vendor:

1. Open the vendor credit from the Vendor Credits list.
2. In the details panel, when the vendor credit has unused credit you will see Credit Available and an Apply Credits button. Click it to open the Apply Credits modal.
3. In the Apply Credits modal you will see the vendor credit’s available balance and a list of the vendor’s bills with their current Bill Balance. Enter the Amount To Credit for each bill you want to apply the credit to. You can apply only up to the bill balance for each bill, and the total amount you apply cannot exceed the vendor credit’s available balance.
4. Click Apply Credits. The amounts are applied: each bill’s balance is reduced, and the vendor credit’s balance and status are updated. When all credit has been used, the panel shows Vendor Credit Utilized (all credits applied to bills). If a bill’s balance reaches zero, its status becomes Paid.

You can apply the same vendor credit to multiple bills in one go or in separate steps. Any unused amount remains on the vendor credit for future use.

Applying credits from the bill

You can also start from a bill when you want to reduce that bill’s balance using one or more of the vendor’s open vendor credits. The Apply Credits button appears only when the bill has a balance due and the vendor has at least one open vendor credit with available balance (so you won’t see it for every bill).

1. Open the bill from the Bills list.
2. When the vendor has open vendor credits, Apply Credits appears on the overview (next to Record Payment) and on the Credits tab. Click it to open the Apply Credits modal.
3. In the modal you will see each of the vendor’s open vendor credits with its Available balance. Enter the Amount to apply to this bill for each vendor credit. You cannot apply more than the bill balance or more than each vendor credit’s available balance.
4. Click Apply Credits. The amounts are applied: the bill balance is reduced, and each vendor credit’s balance and status are updated. If the bill’s balance reaches zero, its status becomes Paid.

This is useful when you want to clear one bill in a single step using whatever open credits the vendor has.

5. Viewing and applying vendor credits on a bill

On a bill’s details panel, the Credits tab lists all vendor credits that have been applied to that bill, with the amount applied and the date. When the bill has a balance due, an Apply Credits button appears so you can apply more of the vendor’s open vendor credits to this bill without leaving the tab. You can open any listed vendor credit from there. If you need to undo an application (e.g. you applied the wrong amount), you can remove that credit from the bill; you will be asked to confirm. After removal, the bill balance is recalculated and the vendor credit’s unused balance increases by the removed amount.

6. Viewing bills credited on a vendor credit

On a vendor credit’s details panel, the Bills Credited tab lists every bill this vendor credit has been applied to, with the amount applied and the date. You can open a bill from there. This helps you see exactly where the credit was used.

7. Editing a vendor credit

You can edit a vendor credit that was created without the “from bill” flow (or after creation, when the form is in full edit mode). Open the vendor credit and click Edit Vendor Credit. You can change the vendor (if allowed), Order #, date, line items (add, remove, or change quantity, rate, discount, and tax), and comments. Tax is loaded per line like on bills. Save to update the vendor credit. If the vendor credit was created from a bill and is still in “quantity only” mode, only the quantities on the pre-filled lines are editable.

8. Voiding a vendor credit

If you need to cancel a vendor credit entirely, open it and use Void (Void Vendor Credit). You will be asked to confirm. Voiding:

• Removes all applications of this vendor credit to bills (as if the credit was never applied).
• Recalculates each affected bill’s balance so it goes back up by the amount that was credited.
• Marks the vendor credit as voided (soft delete) so it no longer appears as an active vendor credit.

Use this only when the vendor credit was issued in error and should be fully reversed.

9. Vendor credit reference numbers

Each vendor credit gets a unique reference number (e.g. VCN-000789) when it is created. The number is generated automatically and is not reused, so you can rely on it for filing and reconciliation.

10. Managing the vendor credits list

From the Vendor Credits page you can search, filter by vendor or status, and change the page size. Use the Columns button to choose which columns to show (e.g. date, reference, vendor, total, balance, status). Your column choices are saved. You can select multiple vendor credits with the checkboxes and use Delete selected to bulk delete (void) them. Click any vendor credit row to open its details in the panel on the right.